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2016 (5) TMI 885 - HC - Companies LawReduction of Equity Share Capital - Held that - This Company Petition is ordered (i) confirming the reduction of the paid-up equity share capital of the petitioner Company duly approved in terms of the Special Resolution passed by the equity shareholders at the Extra Ordinary General Meeting held at Mumbai on 4th December 2015 ; (ii) approving the proposed Minute marked as Annexure-10; and (iii) not requiring the petitioner Company to add the words and reduced to its name as the last words thereof. A certified copy of the order including the minutes as approved be delivered to the Registrar of Companies within twenty one days and the notice of the registration order by the Registrar of Companies and of the said minutes as approved by this Court be published in one issue of English Daily Newspaper viz. Business Standard and in one issue of Tamil Daily Newspaper viz. Malai Malar within four weeks from the date of receipt of copy of the order.
Issues Involved:
Confirmation of reduction of Equity Share Capital under Sections 100 to 104 of the Companies Act, 1956, read with Rules 46 and 47 of the Companies (Court) Rules, 1959. Analysis: The petitioner company sought confirmation from the court for the reduction of its Equity Share Capital, approved by the equity shareholders at an Extraordinary General Meeting. The reduction involved canceling 12,000,000 equity shares of Rs. 10 each out of a total of 233,012,193 equity shares. The company justified the reduction as permitted under Section 100 of the Companies Act, 1956, and Article 4(c) of its Articles of Association. The proposed reduction aimed to decrease the issued, subscribed, and paid-up equity share capital from Rs. 2,330,121,930 to Rs. 2,210,121,930. The company assured that the reduction would not harm the interests of its creditors. The Special Resolution passed by the company outlined the reduction process and authorized specific individuals to apply to the court for sanction. The resolution detailed the reduction from Rs. 2,330,121,930 to Rs. 2,210,121,930 by canceling 12,000,000 equity shares of Rs. 10 each. The resolution empowered key personnel to handle the necessary applications, petitions, and documents for the reduction process. The proposed Form of Minute confirmed the reduction of issued, subscribed, and paid-up equity share capital to Rs. 2,210,121,930, fully paid-up. The remaining unissued share capital was also specified. The company fulfilled the publication requirement by advertising in English and Tamil newspapers, setting the date of hearing. The Regional Director, Southern Region, Ministry of Corporate Affairs, Chennai, expressed no objection to the reduction proposal. Consequently, the court confirmed the reduction of the company's paid-up equity share capital, approved by the equity shareholders. The court also approved the proposed Minute and exempted the company from amending its name. The company was directed to deliver a certified copy of the order to the Registrar of Companies and publish the notice in newspapers. Additionally, the company was instructed to pay a fee to the Central Government Standing Counsel.
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